CTS Announces Fourth Quarter and Full Year 2019 Results
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CTS Announces Fourth Quarter and Full Year 2019 Results

LISLE, Ill., Feb. 04, 2020 (GLOBE NEWSWIRE) -- CTS Corporation (NYSE: CTS) today announced fourth quarter and full year 2019 results.

Fourth Quarter 2019 Results

Full Year 2019 Results

“2019 was a challenging year driven by market softness. We took actions to reduce operating expenses and improve our performance. We also delivered strong growth in cash flow,” said Kieran O’Sullivan, CEO of CTS Corporation. “We anticipate a soft first half of 2020, with improvement in market conditions in the second half of the year. Our strategic priorities remain the same, driving profitable growth, margin improvement and advancing our end market profile.”

2020 Guidance

Full year 2020 sales are expected to be in the range of $450 to $480 million. Adjusted earnings per diluted share for 2020 are expected to be in the range of $1.35 to $1.60.

Conference Call

As previously announced, the Company has scheduled a conference call at 11:00 a.m. (EST) today to discuss the fourth quarter and full year financial results. The dial-in number is 800-309-1256 (720-543-0314, if calling from outside the U.S.). The passcode is 488435. There will be a replay of the conference call from 2:00 p.m. (EST) today through 2:00 p.m. (EST) on Tuesday, February 18, 2020. The telephone number for the replay is 888-203-1112 (719-457-0820, if calling from outside the U.S.). The replay passcode is 6906039. A live audio webcast of the conference call will be available and can be accessed directly from the Investors section of the website of CTS Corporation at www.ctscorp.com.

About CTS

CTS (NYSE: CTS) is a leading designer and manufacturer of products that Sense, Connect, and Move. The company manufactures sensors, actuators, and electronic components in North America, Europe, and Asia, and provides engineered products to customers in the aerospace/defense, industrial, medical, telecommunications/IT, and transportation markets.

For more information, visit www.ctscorp.com.

Safe Harbor

This document contains statements that are, or may be deemed to be, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, any financial or other guidance, statements that reflect our current expectations concerning future results and events, and any other statements that are not based solely on historical fact. Forward-looking statements are based on management's expectations, certain assumptions and currently available information. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof and are based on various assumptions as to future events, the occurrence of which necessarily are subject to uncertainties. These forward-looking statements are made subject to certain risks, uncertainties and other factors, which could cause our actual results, performance or achievements to differ materially from those presented in the forward-looking statements. Many of these, and other, risks and uncertainties are discussed in further detail in Item 1A. of CTS’ Annual Report on Form 10-K. We undertake no obligation to publicly update our forward-looking statements to reflect new information or events or circumstances that arise after the date hereof, including market or industry changes.

Contact

Ashish Agrawal
Vice President and Chief Financial Officer

CTS Corporation
4925 Indiana Avenue
Lisle, IL 60532
USA

Telephone: +1 (630) 577-8800
E-mail: ashish.agrawal@ctscorp.com

 

CTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - UNAUDITED
(In thousands of dollars, except per share amounts)

  Three Months Ended   Twelve Months Ended
  December 31,   December 31,   December 31,   December 31,
  2019   2018   2019   2018
Net sales $ 115,040     $ 120,073     $ 468,999     $ 470,483  
Cost of goods sold 76,340     77,428     311,424     305,100  
Gross Margin 38,700     42,645     157,575     164,973  
Selling, general and administrative expenses 18,037     18,128     70,408     73,569  
Research and development expenses 6,113     5,804     25,967     25,304  
Restructuring charges 2,111     1,698     7,448     5,062  
Loss (gain) on sale of assets 48     (2 )   (63 )    
Operating earnings 12,391     17,017     53,815     61,038  
Other (expense) income:              
Interest expense (903 )   (484 )   (2,648 )   (2,085 )
Interest income 341     459     1,737     1,826  
Other income (expense), net 1,008     (119 )   (2,638 )   (2,676 )
Total other income (expense), net 446     (144 )   (3,549 )   (2,935 )
Earnings before income taxes 12,837     16,873     50,266     58,103  
Income tax expense (benefit) 2,775     (691 )   14,120     11,571  
Net earnings $ 10,062     $ 17,564     $ 36,146     $ 46,532  
Earnings per share:              
Basic $ 0.31     $ 0.53     $ 1.11     $ 1.41  
Diluted $ 0.31     $ 0.52     $ 1.09     $ 1.39  
               
Basic weighted – average common shares outstanding: 32,554     32,983     32,700     33,024  
Effect of dilutive securities 416     562     405     545  
Diluted weighted – average common shares
outstanding:
32,970     33,545     33,105     33,569  
               
Cash dividends declared per share $ 0.04     $ 0.04     $ 0.16     $ 0.16  

 

CTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)

  (Unaudited)    
  December 31,   December 31,
  2019   2018
ASSETS      
Current Assets      
Cash and cash equivalents $ 100,241     $ 100,933  
Accounts receivable, net 78,008     79,518  
Inventories, net 42,237     43,486  
Other current assets 16,992     15,422  
Total current assets 237,478     239,359  
Property, plant and equipment, net 105,038     99,401  
Operating lease assets, net 24,644      
Other Assets      
Prepaid pension asset 62,082     54,100  
Goodwill 106,056     71,057  
Other intangible assets, net 85,215     60,180  
Deferred income taxes 19,795     22,201  
Other 3,046     2,043  
Total other assets 276,194     209,581  
Total Assets $ 643,354     $ 548,341  
LIABILITIES AND SHAREHOLDERS’ EQUITY      
Current Liabilities      
Accounts payable $ 48,219     $ 51,975  
Operating lease obligations 2,787      
Accrued payroll and benefits 9,564     14,671  
Accrued expenses and other liabilities 36,378     37,347  
Total current liabilities 96,948     103,993  
Long-term debt 99,700     50,000  
Long-term operating lease obligations 24,926      
Long-term pension and other post-retirement obligations 6,632     6,510  
Deferred income taxes 5,637     3,990  
Other long-term obligations 4,292     5,919  
Total Liabilities 238,135     170,412  
Commitments and Contingencies      
Shareholders’ Equity      
Common stock 307,932     306,697  
Additional contributed capital 43,689     42,820  
Retained earnings 509,766     478,847  
Accumulated other comprehensive loss (91,726 )   (97,739 )
Total shareholders’ equity before treasury stock 769,661     730,625  
Treasury stock (364,442 )   (352,696 )
Total shareholders’ equity 405,219     377,929  
Total Liabilities and Shareholders’ Equity $ 643,354     $ 548,341  

 

CTS CORPORATION AND SUBSIDIARIES
OTHER SUPPLEMENTAL INFORMATION - UNAUDITED

Earnings Per Share

The following table reconciles GAAP diluted earnings per share to adjusted diluted earnings per share for the Company:

  Three Months Ended   Twelve Months Ended
  December
31, 2019
  December
31, 2018
  December
31, 2019
  December
31, 2018
GAAP diluted earnings per share $ 0.31     $ 0.52     $ 1.09     $ 1.39  
               
Tax affected charges to reported diluted earnings per share:              
Restructuring charges 0.05     0.04     0.18     0.12  
Foreign currency (gain) loss (0.03 )       0.05     0.06  
Costs of tax improvement initiatives             0.03  
Environmental charges 0.05         0.05     0.02  
Non-cash pension expense 0.01         0.02      
Legal settlement (0.01 )       (0.01 )    
Decrease in foreign valuation allowances     (0.03 )       (0.03 )
Transaction costs         0.02      
Discrete tax items (0.01 )   (0.10 )   0.05     (0.04 )
Tax impact related to Tax Cuts and Job Acts     (0.02 )       (0.02 )
Adjusted diluted earnings per share $ 0.37     $ 0.41     $ 1.45     $ 1.53  

Additional Information

The following table includes other financial information not presented in the preceding financial statements.

  Three Months Ended   Twelve Months Ended
  December
31,2019
  December
31, 2018
  December
31, 2019
  December
31, 2018
Depreciation and amortization expense $ 6,581     $ 6,165     $ 24,619     $ 22,514  
Stock-based compensation expense $ 1,065     $ 1,152     $ 5,015     $ 5,256  

Non-GAAP Financial Measures

Adjusted earnings per share is a non-GAAP financial measure. The most directly comparable GAAP financial measure is diluted earnings per share.

CTS adjusts for these items because they are discrete events, which have a significant impact on comparable GAAP financial measures and could distort an evaluation of our normal operating performance.

CTS uses an adjusted earnings per share measure to evaluate overall performance, establish plans and perform strategic analysis. Using this measure avoids distortion in the evaluation of operating results by eliminating the impact of events which are not related to normal operating performance. Because this measure is based on the exclusion or inclusion of specific items, they may not be comparable to measures used by other companies which have similar titles. CTS' management compensates for this limitation when performing peer comparisons by evaluating both GAAP and non-GAAP financial measures reported by peer companies. CTS believes that this measure is useful to its management, investors and stakeholders in that it:

We recommend that investors consider both actual and adjusted measures in evaluating the performance of CTS with peer companies.

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